Moody's cuts Illinois debt rating

Though Illinois took steps in the last year to address its fiscal crisis, including a temporary hike in the corporate and personal income tax rates, the steps did not lift the ratings on its debt.

As the state prepares to take $800 million in general obligation bonds to market next week, two of the three major credit rating agencies kept their ratings the same and one downgraded its rating a notch, which means Illinois continues to lag most other states. The bond issue will help finance school, transportation and other capital projects.

Moody's Corporation" href="http://www.chicagotribune.com/topic/economy-business-finance/moodys-corporation-ORCRP010209.topic">Moody's on Friday downgraded the state's rating from A1 to A2, still investment grade, but in the middle of that range.